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Poking Holes in Sony's Piracy Claims

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Why it's blaming illegal downloads for its exploitation of Michael Jackson.

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Today marks the global premiere of the Michael Jackson documentary This Is It, which chronicles the artist's preparation for a string of his final concert performances in London. Soon after Jackson's untimely passing, Sony Pictures (SNE) -- under its Columbia Pictures arm -- stepped in and bought distribution rights to release the rushed production in 99 countries and 110 territories.

While a simultaneous worldwide release isn't unheard of, it certainly is out of the ordinary. Sony Pictures CEO Michael Lynton gave the reason behind the maneuver in an editorial for Times Online: Piracy.

Lynton claims that illegal downloads would significantly detract from the worldwide ticket sales if the documentary was released in the normal two- to three-month staggered fashion for international showings. "If Sony released it only in the US on Wednesday, by late Thursday it would be camcorded, uploaded on to the Internet and available free to anyone with a broadband connection," he reasons.

In 600 words, Lynton rehashes the timeworn arguments by studio heads that piracy is destroying the movie industry. Not to be confused with DVD burners, VCRs, radio broadcasts, or every single technological innovation that studios shunned, illegal downloads are the real reason why studios are losing money and theater attendance is down.

But, wait. Ticket sales are up this year, actually, by 17.5% to the tune of $1.7 billion. And, look at that! Attendance is up by 16% as well!

Was Lynton making reference to Sony Pictures' earnings that have taken a hit at the hand of the pirates? Surely, they've taken a significant drop since people have discovered BitTorrent trackers and illegal streaming sites, right?

Hmm, that's interesting. According to Sony's latest earnings release from June, sales at the Sony Pictures division actually increased 6.5% year-on-year (a 15% increase on a US dollar basis). It goes on to say, "The increase is primarily due to higher motion picture and television revenues."

Confused? You're not alone. If piracy was a significant detriment to movie studios, why did this year's leaked workprint of Fox's (NWS) X-Men Origins: Wolverine have virtually no effect on its $373 million worldwide gross?

And how is piracy impacting Sony's other recent pictures? The $183 million global tally for District 9, for instance, or the way Julie & Julia managed to break $100 million on its $40 million budget? Or Paul Blart: Mall Cop making seven times its budget back before Sony can count the DVD rental and sales figures? Do you think piracy had much effect on them?

No. Piracy didn't impede their successes.

The simultaneous global release of This Is It was likely to capitalize on the Michael Jackson fever and sales rejuvenation studios enjoyed after his death -- before it all becomes an old hat and glove. Even the film's director and choreographer Kenny Ortega revealed that he never intended to release the private footage to the public. "The recordings were made so we could use them, then the tapes were destined for Michael's private library," Ortega admitted.

Jackson's death kinda put a whole new spin on the archival footage, eh Sony?

In fact, the whole production reeks of an exploitative sales bonanza. The exclusive trailer premiere during MTV's (VIA) Video Music Awards. The single release. The promotional tie-ins with YouTube (GOOG), IMDb.com, and Entertainment Weekly (TWX). Ticket contests and fan photo pages on ThisIsIt-Movie.com, ThisIsItTickets.com, ThisIsItPoll.com, and ThisIsIt-Fans.com.

And in case you're worried, This Is It will be available on DVD and Blu-ray in time for this holiday season.

For Lynton to pin a worldwide release as a means to avoid piracy is a blatantly arrogant misdirect. With record sales and 5,000 theater locations in the US alone, Sony stands to make a bundle off the death of Michael Jackson and -- as history has proven -- piracy won't be a detriment at all.

As far as nefarious practices that might negatively affect Sony's profits, please refer instead to the myriad allegations against it: a fake film critic, DRM and root kit-addled releases, failed proprietary music formats, botched portable gaming upgrades, racist billboards, and artificially inflated prices.

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